ANC told of racism and red-lining in the banking sector

Commenting on the forum with black business held in Athlone Industria yesterday (Tuesday 13 June), ANC MPL and Spokesperson on Finance, Tasneem Essop said:

"There was an overwhelming view that black business is treated with a different yardstick by banks, making it very difficult for them to access finance.

"Some businesspeople complained that banks have become gatekeepers, blocking access to the Khula fund. They also argue that the risk analysis policy of banks discriminates against businesses located in historically black areas.

"It appears that red-lining is still common practice.

"For instance, Mr Joe Ludski described how, despite a 32 year record with a particular bank, had been told by two bank assessors that Athlone was a high risk area when he had applied for R1,2 million loan to expand his business.

"In the construction industry, a major problem for black business is obtaining guarantees required for tenders. Banks insist that capital must be provided by small and medium enterprises before providing guarantees.

"The ANC called on those present to make written submissions so that these could be forwarded to the human rights commission." added Ms Essop.

Notes

ANC leader Ebrahim Rasool has written to Dr Barney Pityana , chairperson of the Human Rights Commission, and raised the possibility of an HRC investigation into racism in the banking sector along the lines of the investigation conducted into the media.

The portfolio committee on Trade and Industry will conduct public hearings today (Wednesday 14 June) in the National Assembly on the banking sector and how they relate to small and medium enterprises.

Issued by ANC Western Cape Communications
For further comment contact Tasneem Essop: 082-258-8732.

ANC told of racism and red-lining in the banking sector

ANC told of racism and red-lining in the banking sector

Commenting on the forum with black business held in Athlone Industria yesterday (Tuesday 13 June), ANC MPL and Spokesperson on Finance, Tasneem Essop said:

"There was an overwhelming view that black business is treated with a different yardstick by banks, making it very difficult for them to access finance.

"Some businesspeople complained that banks have become gatekeepers, blocking access to the Khula fund. They also argue that the risk analysis policy of banks discriminates against businesses located in historically black areas.

"It appears that red-lining is still common practice.

"For instance, Mr Joe Ludski described how, despite a 32 year record with a particular bank, had been told by two bank assessors that Athlone was a high risk area when he had applied for R1,2 million loan to expand his business.

"In the construction industry, a major problem for black business is obtaining guarantees required for tenders. Banks insist that capital must be provided by small and medium enterprises before providing guarantees.

"The ANC called on those present to make written submissions so that these could be forwarded to the human rights commission." added Ms Essop.

Notes

ANC leader Ebrahim Rasool has written to Dr Barney Pityana , chairperson of the Human Rights Commission, and raised the possibility of an HRC investigation into racism in the banking sector along the lines of the investigation conducted into the media.

The portfolio committee on Trade and Industry will conduct public hearings today (Wednesday 14 June) in the National Assembly on the banking sector and how they relate to small and medium enterprises.

Issued by ANC Western Cape Communications
For further comment contact Tasneem Essop: 082-258-8732.